Earlier this month, I introduced the Catholic Legacy Society, an Archdiocesan community newly established to honour the faithful who have written a gift into their will. If you have already made a future gift with the help of a trusted financial adviser, we thank you for investing in the Archdiocese of Vancouver.

Perhaps you are just learning about the idea of planned giving. Simply put, planned giving is a way to support non-profits and charities by making a gift from your assets as opposed to your current income. These gifts are often the largest that a charity will receive all year, and faithful donors can contribute more than they could have in their lifetimes.

Planned gifts are typically arranged in a gift agreement ensuring that the money gifted is allocated according to the supporter’s wishes and the needs of the charity. Working with a professional adviser gives you more control, security, and peace of mind, knowing that your personal investments will go to a cause you care about.

In addition, it affords you the time to decide what matters most to you, before the need arises. Planned giving preserves the relationship between donor and charity for generations to come, serving as a fitting memorial and creating a lasting legacy for you.

Tax benefits gifting shares

If you are planning a cash donation from the sale proceeds of your shares, there are significant tax advantages to donating your shares directly to the Archdiocese of Vancouver. They can be directed without restriction or additional fees to your parish or favorite Catholic charity.

You will receive a tax credit for the fair market value of the shares on the date the Archdiocese receives them. Also, as of May 2, 2006, the federal government created even greater incentives, including the complete elimination of capital gains tax for direct gifts of publicly traded securities to Canadian charities.

This can be contrasted with the scenario where an individual sells his securities and donates the sale of the proceeds. In that case, 50 per cent of the realized capital gain on the sale of the securities would be taxable.

Many of the faithful in the Archdiocese of Vancouver have taken advantage of this gift vehicle to benefit their parish efforts with Project Advance or their Building Fund.

Tax credits for your final tax return

In the year of death, your executor will be required to submit one final tax return on your behalf. Depending on the structure of your assets, you may have additional income often unaccounted for, such as cash from the sale of RRSPs/RRIFs if your spouse is not named as the beneficiary. Tax credits from charitable giving minimize income taxes owed on your final return, which in turn means more of your estate passes to your loved ones. Upon your passing, your estate will be issued a donation receipt for the value of your gift. The federal government has provided an extra tax benefit for bequests. Usually, you can claim charitable tax credits up to 75 per cent of your income. In your year of death, you can claim charitable tax credits up to 100 per cent of your income and excess can be carried back one year.

Gifts of life insurance can ‘multiply’ your estate

Gifting life insurance to the Church is a strategic means to multiply your estate for loved ones because you can structure your giving to reduce probate fees and income taxes on your final return. The death benefit of a life insurance policy does not pass through probate, saving you $14 in probate fees for every $1,000 in your estate. Also, unlike RRSPs (unless your spouse is named beneficiary), benefits paid from life insurance policies are non-taxable. Gifting to the Church a $200,000 RRSP, because of tax paid, reduces the gift by almost 50 per cent. Also, this cuts in half the tax credit to your estate. However, gifting a $200,000 life insurance policy allows the Church to receive the full amount of the gift and you get a much more significant tax credit to be applied to your final return.

The Archdiocese strongly encourages the faithful to discuss charitable giving strategies with professional advisers to ensure you have the proper, legal wording for making a gift to the Church from your will. For a list of allied professionals (financial planners and lawyers) please contact the Development Office at 604-683-0281. Allow us to help you make this important gift and ensure it arrives exactly where you intend.

Brett Powell is the director of development for the Archdiocese of Vancouver.